MAYBE
MAYBE YOU'VE SEEN THE STORES AROUND TOWN. AND WHO AMONG US
HAS THOUGHT THEY WERE
SURE TO FOLLOW
BLOCKBUSTER...AND SLIDE
OFF INTO OBSCURITY?
THEY WERE A COMPANY
STRUGGLING TO KEEP UP
IN THE DIGITAL AGE --
SUDDENLY SEES ITS STOCK
SOAR.
AND IT WAS THANKS
"REDDIT," AN ONLINE
FORUM FOR EVERY TOPIC.
TURNS OUT, SOME REDDIT
USERS DECIDED TO PUMP
THE STOCK... OF 'GAME
STOP.'
THEY SAY THEY DID IT TO
HURT BIG HEDGE FUNDS.
WAIT, WHAT?
WAIT, WHAT?
A
A BUNCH
A BUNCH OF GIBBERISH, RIGHT? BUT BECAUSE IT IS
MAKING NATIONAL
NEWS... WE DECIDED TO
ASK THE TEAM AT THE
BARKER CAPITAL
BARKER CAPITAL
MANAGEMENT AND TRADING PROGRAM AT THE UNIVERSITY OF
IDAHO... TO TRANSLATE
THIS
THIS FOR
THIS FOR US. PEOPLE LOOKING TO GET INTO THE STOCK MARKET
FLOODED ONTO THE WALL
STREET BETS REDDIT PAGE
LOOKING TO GET IN ON
HUGE GROWTH ON
STOCKS. CHATTER ON THE
FORUM HELPED LEAD TO
GAMESTOP STOCK
SKYROCKETING THIS
WEEK.
"WHEN YOU SEE
VOLATILITY IT'S A CHANCE
TO MAKE MONEY ON THE
UPSIDE AND THE
DOWNSIDE AND THAT'S
EXACTLY WHAT'S GOING
ON RIGHT NOW."
DR. DAREK NALLE IS THE
DIRECTOR OF THE BARKER
CAPITAL MANAGEMENT
CAPITAL MANAGEMENT
AND
AND TRADING PROGRAM AT THE UNIVERSITY OF IDAHO. IT'S A HANDS-ON
PROGRAM WHERE
STUDENTS LEARN THINGS
LIKE TRADING AND RISK
MANAGEMENT. HE AND
HIS STUDENTS HAVE
WATCHED OVER THE LAST
WEEK AS PEOPLE NEW TO
THE STOCK MARKET HAVE
JUMPED IN HOPING TO
GET A HOT TIP AND MAKE
MONEY.
"IF SOMEONE IS
SEARCHING ONLINE
WHETHER IT BE WALL
STREET BETS FOR THEIR
NEXT PLAY SO TO SPEAK
THAT DOESN'T SOUND
LIKE AN INVESTMENT
THAT SOUNDS LIKE
SPECULATION."
THAT SPECULATION LEAD
THOUSANDS OF PEOPLE
TO BUY THOUSANDS OF
DOLLARS' WORTH OF
STOCK IN GAME STOP,
AMC, NOKIA, AND
SEVERAL OTHERS. DID THE
GROUP FROM REDDIT
SIMPLY DRIVE THE PRICE
UP BY INVESTING?
"I DON'T THINK IT'S THAT
SIMPLE. I BELIEVE IT
STARTED THAT WAY BUT
IT'S VERY EVIDENT FROM
THE TRADING WHAT'S
HAPPENING IS THE
LARGER MONEY THE
TREND FUND FOLLOWERS
THE ALGORITHMIC FUNDS
THAT'S WHAT'S BEEN
PLAYING WITH THIS NOW.
THIS IS NO LONGER THE
SMALLER RETAIL
INVESTORS."
"PEOPLE SAW VOLATILITY
THEY SAW THIS IS A WEAK
MARKET THAT HAS
POTENTIAL, I DON'T WANT
TO SAY MANIPULATED,
BUT POTENTIAL TO BE
MOVED MUCH MORE
QUICKLY AND TO ME
THAT'S WHAT I SEE IS
HAPPENING."
PROFESSIONAL HEDGE
FUNDS HAD SHORT
POSITIONS ON GAME
STOP STOCK, MEANING
THEY
THEY HAD
THEY HAD AN INTEREST IN SEEING THE STOCK GO DOWN. USERS ON WALL
STREET BETS TOOK NOTE
AND RUSHED IN MASS TO
INVEST IN GAME STOP
KNOWING THAT HEDGE
FUNDS COULD ONLY
COVER THEMSELVES BY
BUYING BACK STOCK TO
MAKE
MAKE UP
MAKE UP FOR THEIR SELLING POSITION.
SELLING POSITION.
IT'S
IT'S A
IT'S A VERY INTRICATE SITUATION BEYOND THAT, BUT THE ENTIRE THING
DREW ATTENTION FROM
PEOPLE NEW TO THE
STOCK MARKET WHO
WERE HOPING TO JUMP IN
WITH NO KNOWLEDGE
AND MAKE MONEY ON
FREE AND EASY-TO-USE
APPS LIKE ROBINHOOD.
DR. NALLE'S STUDENTS
HAVE WATCHED THIS IN
REAL TIME.
"THERE IS SUCH A HUGE
BARRIER
BARRIER TO ENTRY IN MARKETS LIKE THIS THAT IT'S VERY VERY HARD TO
UNDERSTAND UNLESS
YOU'VE STUDIED IT FOR A
LONG TIME."
YES, PEOPLE BUYING
SHARES IN STOCKS LIKE
GAMESTOP HELPED THE
PRICE GO UP BUT SEVERAL
FACTORS AT A MUCH
HIGHER LEVEL ARE ALSO
IN PLAY WHICH MANY
NEW INVESTORS ARE
UNAWARE OF.
BUT, THE HYPE OF THE
WALL STREET BETS PAGE
WAS A PERCEIVED
OPPORTUNITY SOME
DECIDED TO JUMP ON
ANYWAYS.
"AND THEY ARE MAKING
MONEY THROUGH THIS
COMMUNITY THAT IS
MAKING THESE FINANCIAL
TRADES THAT ARE RISKY
NOT FUNDAMENTALLY
BALANCED AND I THINK
THAT REALLY SPEAKS TO
THE REACH THAT THIS
COMMUNITY
COMMUNITY HAS." INVESTING AND GAMBLING FOR INSTANT
PAYOFF ARE DRASTICALLY
DIFFERENT STRATEGIES.
THE POPULAR
ROBINHOOD SERVICE
WHICH MANY NEW
INVESTORS
INVESTORS WERE JUMPING ON BLOCKED USERS FROM BUYING
STOCKS LIKE GAMESTOP
THAT WERE SEEING
VOLATILE MOVEMENT.
DR. NALLE SAYS THIS
WHOLE TREND ISN'T NEW,
PEOPLE HAVE SHARED
STOCK SPECULATION FOR
YEARS, AND HE BELIEVES
THINGS WILL LIKELY
RETURN TO NORMAL
SOON. SERVICES LIKE
ROBINHOOD THAT
ALTERED TRADING
ABILITIES LIKELY DID THAT
TO HELP MAINTAIN
MARKET HEALTH.
"THERE IS A SAYING THAT
THE MARKET CAN REMAIN
IRRATIONAL LONGER
THAN YOU CAN REMAIN
SOLVENT. THEY ARE
TRYING TO KEEP THOSE
PEOPLE HAVING A
POSITIVE ACCOUNT SO
THEY CAN CONTINUE TO
MINE THE MINERS."